GBP/USD – Inflation Remains Sluggish as CPI Dips Below Zero

GBP is showing some fluctuation on Tuesday, as the pair trades just below the 1.53 line early in the European session. Taking a look at economic releases, British CPI slipped into negative territory for the first time in 5 months, coming in at -0.1% in the September report. This was a disappointment for the markets, although the reading was within expectations.

There are no major events out of the US on Tuesday. Traders should keep a close eye on Wednesday’s key releases, all of which are market-movers. The UK releases Average Earnings Index and Claimant Count Change, and the US will release Core Retail Sales, Retail Sales and PPI.

The Fed minutes are now behind us, but the key question remains – will the Federal Reserve press the trigger and raise rates in 2015? The markets had circled September as a likely candidate for a rate hike, but the Federal Reserve remained on the sidelines yet again. The Fed released the minutes of its September policy meeting last week, and indicated that the Fed does not feel that the timing is appropriate for a rate hike, but provided few clues as to when the Fed might take action. Policymakers cited concerns that the sluggish global economy could affect the US economy.

GBP/USD posted slight losses in the Asian session and is showing fluctuation early in the European session.

1.5269 is a weak support level.

1.5341 has switched to resistance as a result of the pound’s losses.

Current range: 1.5341 to 1.5485

Further levels in both directions:

Below: 1.5269, 1.5163 and 1.5026

Above: 1.5341, 1.5485, 1.5590 and 1.5660

OANDA’s Open Positions Ratio

GBP/USD ratio has shown slight movement towards short positions on Tuesday. Long positions continue to retain a majority (58%). This is indicative of trader bias towards the pound moving higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.

MarketPulse is a forex, commodities, and global indices analysis, and forex news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

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